Cybernaut

The $5 store

The idea got rolling in the U.S. in February and recently
jumped the border into Canada with the full support of the Songwriters
Association of Canada: charge all broadband internet users a flat monthly fee
of $5 and legalize the trade of music through peer to peer (P2P) services.
Internet Service Providers (ISPs), like Telus and Shaw in Whistler, would track
the songs that are being traded and make payments to recording companies based
on traffic statistics.

The music industry has tried going after the downloaders
directly, but there are just too many people out there using P2P programs, and
each case costs too much in time and resources to prosecute. They’ve tried to
lobby governments to create new laws that would make ISPs responsible for all
illegal downloading, but governments have been unwilling to shoot the
messenger. The industry has even tried to embed CDs with digital rights
management software that prevents buyers from copying songs on their computers,
but that turned into a fiasco when the software functioned like a virus.

But while other approaches have failed, I really believe the $5
plan is a good idea with a few negative points. The most obvious is that the
tax would be applied across the board, and many people who don’t currently
steal music would end up paying for those that do. Obviously the ISPs can snoop
on their customers and apply the charge when they detect P2P activity, but that
complicates the situation — it’s far easier just to apply the charge with no
exceptions, and encourage everyone to trade music.

Another negative is the impact on Apple shareholders by killing
the iTunes Music Store, although judging by the speed in which the company is
moving into movies and television I think Apple already sees the writing on the
wall.

The $5 fee also props up a failing industry that would rather
litigate than innovate, and that is in large part responsible for its own
financial woes because of its unwillingness to change and embrace technology.
At a time when Trent Reznor of Nine Inch Nails and Radiohead are showing the
way, bypassing the music industry to release music directly to the web, the fee
would secure the music industry’s future at a time when it seems destined to
fail.

Although $5 seems like a bargain to me — I used to spend $30 to
$50 a month on music when we had a CD store in town — it adds up. As of last
July, roughly 53 per cent of 116 million American households were broadband
subscribers, which means roughly 61 million homes would be on the hook for the
$5 charge. That’s more than $305 million in revenue per month, and $3.66
billion per year.